So we were thrilled when one of our clients called last week to ask us to help her make special gifts from her account to her five grandchildren’s college 529 accounts for Hanukkah.
You probably know that parents or grandparents can gift up to $15,000 per person per year without reporting the gift for tax purposes or using up any of their lifetime exemption. Think of these annual gifts as tax “freebies.”
And gifts to college 529 accounts are extra powerful, because the funds grow tax-free inside the 529 account and can typically be withdrawn tax-free to pay for qualified higher education expenses.
This makes it so easy for parents, grandparents, or other friends and relatives to leave an educational legacy to their favorite students.
The Takeaway: Do you want to make a special gift for the holidays? Let us know if we can help give you ideas on smart ways to gift to that special person or your favorite charity!